A Burning Issue

A Burning Issue

Palm oil shows promise as a
biofuel, but the environmental cost of production can be high.

Tour guide Asok Kesavan has brought
his multinational group of tourists to see some of the oil palm plantations in
the countryside in his homeland, Malaysia. He asks his driver to stop the bus
and the tourists unload briefly for a walk through the rows of palm. There are
many, many rows. "This is not a family business. These are big private
companies and Malaysia is the largest explorer and producer of palm oil,"
Kesavan says, pointing out the grape-like clusters of ripening fruit that
nestle between trunk and branches like an overflowing treasure chest. The oil
is used for everything from margarine to cosmetics, and it is exported
worldwide. "We are the only country to sell oil to the Middle East," he jokes.

Palm oil is one of the world's
leading agricultural commodities. The two biggest producers, Malaysia and
Indonesia, account for 84 percent of the world's palm oil production and ring
up sales of US$11 billion annually. But as Asok Kesavan knows, lucrative crops
can bring trouble. He has seen the fires and the smog, just like his countrymen
and millions of others in Indonesia, Singapore, and the rest of Southeast Asia.
Plantation owners slash and burn existing vegetation to clear the way for more
and more palm, rows and rows sown in place of once-lavish and ancient
rainforests. The forests, obliterated by fire, are replaced by hectares of monoculture, and the
ground beneath is kept clear of even shade-tolerant native species.

Bad as it already is, this
situation may be set to worsen. The world can only use so much lipstick but its
appetite for energy seems insatiable, and palm oil may be the Next Big Thing in
energy. As biofuels take center stage and governments mandate their
use-ironically for the environmental benefits-additional forest destruction,
and the attendant loss of wildlife and proliferation of smoke-filled skies, are
likely to ensue.

Hot Oil

The World Rainforest Movement (WRM)
believes that plans for new plantations in Indonesia are already in the works.
"Existing regional plans have already allotted a further 20 million hectares
for oil palm plantations, mainly in Sumatra, Kalimantan, Sulawesi, and West
Papua," WRM noted in a recent bulletin, "and new plans are currently under
discussion to establish the world's largest palm oil plantation of 1.8 million
hectares in the heart of Borneo."

Ellie Brown, lead author of the
U.S. Center for Science in the Public Interest (CSPI) report Cruel Oil: How
Palm Oil Harms Health, Rainforest & Wildlife, says the owners of these palm
oil plantations will be largely either big business or government. "In
Indonesia, half of the plantations are owned by private companies, which are often
part of large conglomerates; the remainder are owned either by the state (17
percent) or by smallholders (33 percent), she writes. "Smallholders are farmers
who own a few acres each in a section of a large company's plantation. Although
they tend their own oil palm trees, they depend on the company for planting,
pesticides, fertilizers, sale of the palm fruits (at a price set by the
company), and initial processing in the company's on-site mill." And in
countries where state-owned land is the norm, many of these plantations are
affiliated with the state. "Especially in Malaysia and Indonesia, which have
the lion's share of the global market, national governments have made mammoth
tracts of land readily available for companies to establish oil palm plantations,"
writes Brown.

The biofuel boom is spurring
companies to turn more and more of these vast areas into oil palm plantations.
John Buchanan, senior director of business practices with the U.S.-based NGO
Conservation International, says that palm oil's energy efficiency as a biofuel
makes it very attractive to investors. "One of the common measures used to look
at the factor or efficiency of a biofuel crop is a ratio-the number of units of
energy put in, to get how many units of energy out," he says. "It's a key
factor because in some of these crops, for example corn and ethanol, it's not a
whole lot of savings. It's about 1 unit of fossil fuel only getting about 1.4
units of ethanol on the back end. Palm oil, on the other hand, ranges from
about 5.6 to 9.6. So if palm oil were traded freely, palm is going to be more
profitable." WRM notes that demand for palm oil is expected to double worldwide
by 2020, and the Indonesian government reportedly has announced that it will
designate 40 percent of its oil palm crop for biofuel production.

U.S. companies have long been
eyeing the palm oil market for biofuel. Last December, the Illinois-based
agro-giant Archer Daniels Midland (ADM) acquired shares of Singapore-based
Wilmar International, a palm oil plantation operator and oil producer. The move
made ADM the second-largest shareholder in the company. "ADM is making a big
push and they're very bullish on the biofuels," said Buchanan.

The market may well deliver a
windfall for palm oil investors. "The barriers to entering the biodiesel market
for palm oil are very low," says Harry Boyle of the London research firm New
Energy Finance. "It's not difficult and it's not expensive. To build a plant to
process palm oil into biodiesel is pretty easy." He notes that the only hindrance
to unlimited market potential may be shipping costs.

Paying the Piper

There are other costs, however,
that markets often ignore. The oil palm grows only in tropical climates, the
same climate that harbors some of the most biodiverse and abundant rainforests
in the world. "The impacts on biodiversity are huge," says Ricardo Carrere of
the WRM international secretariat in Montevideo, Uruguay. "Many animal species
particular to tropical forests need extensive areas of forest to survive and to
be able to reproduce, so when all of these forests are burned and then planted
to one single species, that provides the animal with no food. Then many species
tend to disappear or their numbers decrease substantially. At the same time,
all of the local flora disappear because the plantation owners don't want
anything to grow underneath, and we're talking in terms of tens of thousands or
hundreds of thousands of hectares. There are enormous areas of land where the
diverse tropical rainforest is being replaced by a monoculture."

A century ago, according to CSPI,
80 to 90 percent of Indonesia was covered by tropical rainforest. In 1997, only
half was. At this rate, CSPI estimates, "virtually all Indonesian lowland
tropical forests-which are the richest in plant and animal species-will be gone
by 2010." Between 1985 and 2000, the group says, 87 percent of all
deforestation in Malaysia was due to oil palm plantations.

Among the animal species vanishing
in the rainforest destruction are the Sumatran tiger and rhinoceros, Asian
elephant, orangutans, wild ox, barding deer, giant flying squirrel, proboscis
monkey, gibbons, langurs, and clouded leopard; "...a species extinction spasm of
planetary proportions," writes Ellie Brown in her report. The rainforest
destruction and species elimination is directly attributed to these plantation
burns: "Borneo's orangutan population was reduced by one-third in just one
year, 1997, when almost 8,000 orangutans were either burned to death or were
massacred when they tried to escape fires."

Human beings are not exempt from
the destruction either. During the hot months (July through October) the effect
of the smoke and smog on Southeast Asia is easy to see, and smell. Pollutant
Standards Index (PSI) readings reached as high as 150 last year in Singapore
during the months before monsoon rains squelched the fires. (Asian newspapers
advise readers not to go outside on days when the PSI crosses 100-which is
frequently-due to risks of respiratory distress and disease, lung cancer, heart
attack, and stroke.) In Indonesia and Malaysia, long-time business owners had
to close shop for good due to health impacts, and airports were closed for days
on end due to low visibility. The fires had a major impact on regional markets:
the Asian Development Bank estimated regional business losses from the 1997-98
fires at over US$9 billion.

But Carrere says that the impact on
human health and welfare extends beyond the effect of lost revenues. "This is
not environmentally friendly at all. It's genocide of local populations," he
says. "What happens in many tropical countries is the land and the forest
belongs to the state. However, in those forests there are a number of
communities that have always been there and had no land title because they
existed before the state, even before the colonizers came, so those lands
belong to these people. But the state says no, this belongs to the state, so
they give concessions first to the logging companies and then to the plantation
companies. People resist... because they are protecting their land and their
means of livelihood, so...people are put in jail...and are killed and tortured.
Rights abuses are happening throughout the tropics, particularly with biofuel
plantations."

And oil palm plantations make the
land itself hazardous. "They drain the wetland areas because oil palm needs it
[less] humid to be able to grow properly, so water trenches are made so water
flows out of the plantation," says Carrere. "At the same time, they use a lot
of pesticides, agrochemicals, so that's the same water that's leaving the area
and flowing into the region's rivers." Rich organic peat is often set afire and
burns for days deep below the surface of the land.

Finally, there is the cost of palm
oil plantations to the climate itself-the very thing biofuels are supposed to
help. Renyi Zhang of Texas A&M University and his colleagues conducted a
three-year study of satellite imagery in the Pacific region. They compared
images taken between 1984 and 1994 with images from 1994 to 2005 and determined
that deep convective clouds had increased between 20 and 50 percent due to
pollution from Asia. These high-altitude storm clouds, seeded by microscopic
pollutant particles, are expected to result in more brutal thunderstorms and
more severe rainfall, especially through the winter months, in areas already
too familiar with extreme weather disasters. Zhang's team also projected that
as more of the pollutants travel on these more energetic, large storms with
warmer air currents from the tropics, the deposited soot could accelerate the
melting of polar ice.

Pointing the Finger

The obvious question is, exactly
who is setting these fires, and why are they not being brought to justice?
Andrew Ng, secretary-general of the Roundtable on Sustainable Palm Oil (RSPO),
an organization of large oil palm companies, oil palm trade associations,
retailers, manufacturers, environmental and conservation NGOs, and social and
development NGOs, says that finding the fire starters is harder than it sounds.
"Finding the source of the fires, the fact is that it's quite nebulous in a
sense. It's all just smoke, isn't it? At the end of the day, that's all you see
in the sky," Ng says. "For every fire that you find, the source of it is quite
difficult to trace. Sometimes you can trace it back to [an] estate. Sometimes
you trace it from outside of the estate coming from the adjacent communities of
land where they prepare the annual crops. So trying to find many small little
sources, the hot spots here and there that create the big fires, is hard."

But Ricardo Carrere argues that the
inability to find the fire starters may itself just be so much metaphorical
smoke. "Even the companies have been identified by name. And nothing happens
because these companies have very strong links with government," he says. "They
want this plant and it doesn't matter if the company is punished or not. It's
the returns." Corruption in the Malaysian and Indonesian governments is nothing
new, and certainly the lure of a lucrative crop is cause for these governments
to turn a blind eye. In 2004, the civil society NGO Transparency International
ranked Indonesia as the 13th most corrupt country in the world-that the
country's plantation and forestry sectors are in fact rife with corruption,
collusion, and nepotism. Singapore's Straits Times newspaper last October
reported that the logging firms are "believed to be owned by or linked to
people with ties to the ruling elite and the military."

Government officials deny
responsibility. Malaysian officials last October blamed not the large
plantations, but instead poor farmers who use fire to clear their land. On the
other hand, the Center for International Forestry Research studied satellite
photos of the burns that took place in Indonesia in 1997-98 and compared these
photos to Indonesian land-use maps. They found that 75 percent of the hot spots
in Kalimantan were in oil palm plantation and logging concessions.

One government official, Malaysian
Environment Minister Azmi Khalid, believes the culprits are the big companies,
and says so. "Open burning for land-clearing is the cause of the haze. In
Kalimantan alone, there are now one million hectares of palm oil plantations,"
he said, noting that 16 companies were under investigation in connection with
the fires last October. Still, these companies have never been brought to
justice. During the previous prolonged period of haze in Southeast Asia, in
1997 and 1998, 176 companies were publicly identified as violators. Only five
were brought to court. One was found guilty.

Corruption is only one part of the
reason. Ng says the other part of the equation is the difficulty of
enforcement. "Indonesia and Malaysia both have an excellent system of laws and
within those laws the punitive measures are very good. But the problem that you
have is enforcement, because of the lack of resources available for ensuring
that government agencies have enough manpower to go out there and educate the
public in these areas, and to monitor these areas and ensure that control
continues," he says. "Unless people are willing to put money into these things,
you're going to see the fires crop up again this year. We're going to have a
dry spell in a couple of months time [June, July] and they'll keep going on
until there's nothing left to burn because fire is really the only practical,
in a sense, and I put that in quotation marks, way to clear land."

Ng's group has established a set of
global guidelines for sustainable palm oil production, including compliance
with all local, national, and international laws and regulations, and ensuring
a flow of information from plantation owners to RSPO stakeholders for
verification of methods. RSPO has also drawn up a zero-burn policy for
plantation operators who are members. Ng says that zero burn is a win-win
situation. "Ask anyone in the palm oil plantation industry and they'll tell you
that it's actually far better for the land not to burn, not just from the point
of view of carbon emissions, but zero burn actually gives you long-term
benefits," he argues. "When you do zero burn, you recycle all of the planting
material and reintroduce it back into the soil. That gives you long-term input
into the soil for fertility."

The RSPO is not the only
organization pressing to reduce and eliminate oil palm burns. Representatives
from Singapore, Malaysia, Indonesia, Brunei, and Thailand met last November to
set policy and budgets for dealing with burns and haze. During this summit they
set aside funds to provide incentives to farmers to abandon slash-and-burn land
clearing, and strengthened enforcement of burn laws against plantation
companies and forest concessionaires caught violating them. For example,
Indonesia says it will increase funding for law enforcement and train its
police force, prosecutors, and judges to crack down on forest fire violations.

If these measures work, the
evidence of success, or failure, will appear in the skies-literally as smoke
signals. "I don't think we can solve this within a year. It will take a
long-term solution," said Singapore Environment and Water Resources Minister
Yaacob Ibrahim during the talks. "We will have to see if farmers are prepared
to change habits, whether the Indonesian authorities are prepared to clamp down
on errant plantation owners. By and large we are quite happy [with the talks' results],
but obviously the devil is in the details." Ng agrees: "Depending on how bad
the fires are, I guess we'll find out if the fires are an issue that will again
be brought up as in the previous times," he said of this coming November's
negotiations.

Many countries aren't waiting for
the companies and governments in Southeast Asia to sort it all out and are
instead taking matters into their own hands. This past April, scientists and
policymakers from over 100 counties met in Brussels to discuss global warming,
and palm oil as a biofuel figured into their equation. Dutch companies such as
Biox and Essent have either scrutinized or completely halted palm oil
production until they can verify that their suppliers did not burn forests in
the growing process. "From the start, we knew we can't stay in business if we
can't prove that production is sustainable," said Biox executive Arjen
Brinkmann. Britain's largest electricity supplier, RWE npower [sic], announced
that it too has decided against using palm oil for biofuel after a year of
study due to the prevalence of unsustainable growing methods. In January the
European Parliament considered a ban on imports of nonsustainable palm oil as
well, even though it is anxious to reduce fossil fuel consumption.

This coming year's haze is
predicted to be even worse than last year's. Ricardo Carrere suggests that the
real culprits ultimately are energy consumers. "On one hand, all of the
governments of the world are saying we need sustainable development, we need to
conserve water, we need to conserve biodiversity and climate and all the rest.
But on the other hand, all the economic policies go in the opposite direction,"
he says. "It's not that biofuels are wrong. It's the unsustainable consumption
that is wrong. Too much energy is being used and there's no way that by
producing biofuels it is going to be able to feed all of those cars in the
[global] North. Consumers cannot keep using energy in an unsustainable manner."

Heather Augustyn is a freelance
writer who spent five weeks in Singapore, Malaysia, and Indonesia during the
fall 2006 burns. She has written for E! The Environmental Magazine,
EarthTimes.org, Shore Magazine, The Village Voice, and In These Times.